On Tuesday, Energy Minister Rich Coleman signed two cabinet orders directing the B.C. Utilities Commission to adopt a proposal that will set the Hydro increase at 17 per cent over three years. The move effectively sidelines three weeks of intensive oral hearings that had been slated in June for the commission to review the rate application. Coleman said he issued the cabinet orders because the commission was aiming to set next year’s Hydro rates significantly higher than government wanted.

“I don’t know why, but they’ve decided that they feel we should be asking more from the customers in B.C.,” Coleman said in an interview Tuesday.

“I think they’re just trying to err on the side of caution.”

Hydro rates rose eight per cent in 2011, and another 7.1 per cent this year.

Coleman said the utilities commission was pushing for a further increase for 2013 of about seven per cent, something he said was excessive.

In Tuesday’s cabinet orders, Coleman told the utilities commission to set next year’s increase at just 1.44 per cent.

At issue in the dispute over rates is a question of how much revenue Hydro needs to operate each year in order to fund its massive infrastructure demands and pay down more than $2 billion in deferral accounts.

On Tuesday, Coleman said his new plan meets all of those requirements.

“I’m comfortable with the decision, very comfortable,” Coleman said, adding the plan will see Hydro pay $250 million toward its deferral accounts by March 31, 2014.

“We’re trying to run this thing in a way that it has the money it needs to operate, stays within its debt-to-equity ratio and can do the capital job it does — which it’s doing — and keep the rates competitive in North America,” he added.

“I think this accomplishes all of that.”

Tuesday’s orders are part of a larger process tracing back to when BC Hydro said it would need a rate increase of 32.61 per cent compounded over three years to meet its obligations.

Government met that request with a review that identified a series of savings. Under the plan approved by Coleman Tuesday, the three-year increase will be about 17 per cent.

Coleman’s plan also means people will see an increase of just 1.44 per cent on their Hydro bills about a month ahead of the 2013 provincial election.

But Coleman refused the idea this was his government playing politics.

“It really isn’t about politics,” he said.

“It’s really about meeting a commitment we made, which is we would go take a look at Hydro, find its costs, find its savings, do a better job of it and pass that on, which is what we’re doing.”

New Democratic Party energy critic John Horgan called Tuesday’s move “the culmination of a decade of disastrous energy policy in British Columbia.”

“The utilities commission was created and designed to protect ratepayers from governments that are acting just like this one is today,” said Horgan.

“That shouldn’t be decided by cabinet ministers in a dark room on a weekend,” he added.

“It should be decided by sober thoughtful reflection on what our assets are, what our liabilities are, what our load demand is and what our sources are, and they’re not doing that.”

Nakoneshny said the commission panel will meet in the days to come to determine what to do next.

“[The panel will] decide what the next process step should be, whether that means a procedural conference where all the parties get a chance to provide their views with regard to the two [orders in council] and what the next steps are, or the commission panel may decide they want written submissions,” he said.

“I’m anticipating the panel will want the parties to provide some sort of commentary, and not just have the panel decide on its own.”

Tuesday is not the first time Coleman and the commission have been at odds over Hydro rates.

In February, the commission denied a government-backed proposal to hold rate increases at 3.91 per cent for the 2012-13 fiscal year.

Pointing at Hydro’s need to repay its deferral accounts, the commission set the increase at 7.1 per cent.

At the time, Coleman said he was not happy with the decision, but acknowledged he had to respect it.

“At the end of the day, they’re the utility commission,” he said then. “They make the final decision.”